"James Bond's" Predictions for 2014...and Beyond

I first met Joe in Mongolia last year. He is one of the most fascinating men I've had the pleasure of meeting. A spook from the cold war with stories that would not be out of place in any spy novel. Truth truly is stranger than fiction.

This is not the first time I've written about our favourite curmudgeon. Joe was previously introduced in a post discussing elderly care here. He was Formerly COO and CFO, Executive Vice President and Member of the Board of the Atlantic Council of the United States in Washington, DC. He was also the U.S. Representative of the Atlantic Institute for International Affairs in Paris, France.

He has written professionally on economic development and international security affairs. On the lighter side, he is co-author of GAMBIT with Antoinette Falquier, a novel of international intrigue, nuclear hijinks and improbable espionage. I have read the book and have to say that it should be made into a movie. It has all the ingredients that are required for a fantastic, action packed screenplay, but I digress.

Joe recently sent me his projections for 2014. Given his incredibly diverse background and involvement in geopolitics, combined with the very real fact that he's already doubled my time on this ball of dirt and amassed more insights and experience than I can hope to acquire in my lifetime, I always find his views interesting. He kindly agreed to share them with our readers.

11/20/13

The Early Line on 2014

by: Joseph Harned

It is said that making predictions is often a risky business, particularly when they're about the future. The “early line” is what book makers call the very first predictions by odd makers about a given outcome. Early lines are the riskiest predictions of all. Sheer folly. Pure chutzpah. All hat, no cattle. With that in mind, and tongue firmly in cheek, here are my early lines for 2014 – in no particular order of importance.

Mid-term U.S. election results will see the Democrats retaining control of the Senate and re-taking control of the House despite the lowest voter turn-out in decades. Pundits decide this resulted from the Tea Party overplaying its hand, the "sane Right's" inability to provide an attractive alternative to the "insane Right", and the traditional ability of the left to organize reluctant voters to vote early and often.

In Europe, the French government's steadfast determination to refuse to f*#k its poor with austerity programs just to appease its right wing and German overseers actually begins to pay off, as the French economy rebounds while the German economy falters and its oh-so-determined society faces self-doubt. Some Euro-meisters are heard to mutter that “a little inflation may even be a good thing”.

The price of gold breaks below $1100 per ounce, as even the most fervent gold bugs are forced to admit that 1) the gold market price is manipulated, and 2) not by me. [We spend a fortune to find and mine the stuff, only to hoard and bury it again. At least with oil, between finding and “mining” it, and eventually sequestering by burying the CO2 it produces, we at least get some working productivity out of it.]

For the first time, India is beginning to realize its extraordinary potential by making progress in taming the high inflation that has crushed economic growth until now. The rising economic tide has muted fractious internecine political struggles, secular battles and religious antipathies enough to permit the population to see light down the tunnel together. Possibilities unlimited.

Energy-dependent Mideast governments are rapidly losing their leverage as the U.S. becomes the largest oil producer in the world, and fracking enables old and marginal fields to become productive.

As a corollary to an increasingly marginal Middle East, the Shi'a versus Wahhabi, Iran versus Saudi proxy struggles become rapidly marginal. Now it's just sand they are fighting over. So be it. Let them at it.

Which leaves Israel. For the first time since 1920, the U.S. Has the leverage to arrange a two-state sit-down-and-shut-up peace accord with Israel, and between Israel and Palestine and Jordan. And no one, no one, wants it more than American Jews, who are sick and tired of being arm-twisted and guilt-driven by Israel into indefensible positions of backing colonialist Israeli policies.

China succeeds on two fronts simultaneously: first, in shifting with alacrity from a developing-nation exporting economy to a newly industrializing nation consumer-spending economy; and second; from highly pollution per-capita developing nation to a moderate pollution per-capita more responsible nation. The ability to accomplish both steps in tandem provides China with increased political and even moral leverage in Africa as well as Asia.

Japan, on the other hand, weakens its short term 2013 growth spurt by enacting consumption taxes meant to pay for the increasing costs of caring for an inverted pyramid of aging population cohort depending upon decreasing working population cohort. [The Japanese should, of course, adopt the Israeli system of training the mobile aged to care for immobile aged.]

Africa truly begins to come into its own, led by Botswana, which proves to foster better political leadership and less corruption than its southern neighbor. As China and now India do well, resource-rich, newly capitalized and trained Africa will prosper.

Mexico, undergoing real structural and political reform, will take advantage of a recovering U.S. economy, and begin a decade of unprecedented growth.

Downside risks include the knowns, the unknowns, the imponderables (that which we don't know we don't know), and a new category that has cost us more lives and dollars already than anyone predicted: climate change. As a layman, reading voraciously, with a lifetime of contacts and access, the best I can make of it all at this date is: By 2030 – in 16 years or so – we will have serious crop failures in sub-Saharan Africa and Southeast Asia which will result in massive starvation and political upheaval. If you have a five-year-old today, his or her likely military or alternative healthcare service will be connected to this crisis. By 2050 the U.S. will have lost 15% of its habitable near-shore cityscapes and housing, and crop failures will be affecting the U.S. Heartland. If you have a child – any age – this will be its future.

Our old friend and cricket Naresh correctly pointed out that I failed to mention the increasing danger of a conflict between China and Japan. So, Here's a PS for Naresh:Ever since Chiang Kai -Shek escaped across the Straits, whenever the Communist regime has needed a unifying cry to attempt to (ever so briefly) unify the 56 diverse ethnic groups speaking 292 different languages of China, they have called for reuniting Taiwan with the Mainland. No issue historically has had the same emotional, patriotic, political fervor, though the population being so disparate that fervor is always short-lived and cannot be counted on often.With the economic integration of Taiwan and the mainland, the cross-fertilization of investments and integration of technology, that arrow is no longer in the political quiver. It is being replaced by a handful of less effective arrows regarding contested islands in the Pacific. Each island has a 200-mile exclusive economic zone extending from its coastline, encompassing vast undersea areas of potential oil, gas and mineral resources. This fight over contested islands' historical jurisdictions is being picked in particular with Japan, as the Chinese have long memories of Japan's tortuous occupation in World War 2, which can be exploited politically by China's Communist leadership. Look for Sino-Japan relations to heat up in 2014.To give you some perspective on the importance of the economic issue, while it is said that the U.S. doubled it's size and potentially its wealth with the Louisiana Purchase under President Thomas Jefferson in 1803 at a cost of 50 million FFrs, in fact the U.S. more than doubled its size and potentially its wealth under Ronald Reagan in 1983 with his creation of the Exclusive Economic Zones extending from 3 miles to 200 miles from our shores -- all our shores, the mainland, Alaska, Hawaii, all islands, protectorates -- some 3.4 million square nautical miles of ocean -- under the 1982 United Nations Convention on the Law of the Sea. And for a Reagan'esque no money down!

Some very interesting and hopefully contentious food for thought!

- Chris

“American exceptionalism is a reaction to the inability of people to understand global complexity or important issues like American energy dependency. Therefore, they search for simplistic sources of comfort and clarity. And the people that they are now selecting to be, so to speak, the spokespersons of their anxieties are, in most cases, stunningly ignorant.” ? Zbigniew Brzezinski

I want the Pentagon closed in Washington, DC, and moved to whatever Middle Eastern country the US has a problem in. Real estate prices in Washington, DC, would drop like a rock. Delist all defense stocks from Wall Street. Whatever Middle East country the US has a problems in, that's the only country in the world where defense stocks can trade.

Somebody might want to point out to Zbig that it's hard to make rational decisions when your Govt. hides 90% of the known information and the hidden players and policies that underlie current events.

Sadly, I will concur with his assessment of the quality of the representatives we are allowed to choose from. Even when a stray maverick slips through the sieve, we still make the wrong choices.

American politics has devolved to a Honey Boo-Boo pageant with the frilliest dress and the biggest dimples winning the day, only to find a selfish, spoiled, sugar addled tyrant behind the facade.

I've never seen anything good come from an organization without effective people in a leadership role to set objectives and guide them to completion. What use are predictions of future events if you are only capable of reacting to current events in a haphazard 'emergency measures' fashion instead of actively shaping events to a desired outcome?

FLASH-----April 1, 2014. April Fools Day. After repeated unsuccessful attempts to correct flaws and remedy Obamacare , President Obama today announced a National One Payer Health System through nationalization
of the entire healthcare system. In the process government law enforcement officials raided the offices of all major insurance companies and seized records of patient transactions, lobbying efforts , management compensation and kickbacks a well as collusion with hospitals, medical practitioners and pharmaceutical firms.
Wall Street reacted with a 50 percent drop while Main Street celebrated with a ticker tape parade. National Guard troops were stationed at hospitals and Doctor's offices insuring healthcare is provided at gunpoint.
Meanwhile Congress went on a regularly scheduled Spring break.

After the midterms and all the shitbags in Congress are re-elected. Barry can't move until after the midterms. But the rest is potentially spot on. The idiocracy called 'Main Street" like to have parades for shit that will either kill or enslave tem-or both.

US - largest oil producer ? - By some measures it already is, but it matters little, because it is expensive oil. I really question his geopolitics expertise as he believes it is only for sand. LOL. If that were the case we would see the US withdrawing.

“American exceptionalism is a reaction to the inability of people to understand global complexity or important issues like American energy dependency. Therefore, they search for simplistic sources of comfort and clarity. And the people that they are now selecting to be, so to speak, the spokespersons of their anxieties are, in most cases, stunningly ignorant.” Zbigniew Brzezinski

I am sitting in the Moscow Airport business lounge. Very very luxurious. The people I know in Russia are more capitalists than most US politicians. There are more socialists an communists in Washington D.C. Than all of Russia.

"“American exceptionalism is a reaction to the inability of people to understand global complexity or important issues like American energy dependency. Therefore, they search for simplistic sources of comfort and clarity. And the people that they are now selecting to be, so to speak, the spokespersons of their anxieties are, in most cases, stunningly ignorant.” ? Zbigniew Brzezinski"

This is so funny to watch...gold bugs and gold hoarding IS the slow motion car wreck, folks. You can bet that probably 2/3 of the commentators here agreed and shook their head with approval when reading the predictions, but once they got to gold going under 1000/ounce they exploded with uncontrollable gold bug rage.

I for one agree. Democrats can get people to actually care about elections, and he's completely right about the insane right wing/sane right wing schism that has all but destroyed the republicans. He's also right about shale oil and fracking and by the way a huge amount of fracking is done by U.S companies in Australia and Canada..for the benefit of the U.S of course so we are well on track to energy independence.

show me 10 year treasuries dropping under 1% and show me real estate making a giant price rise WITHOUT a credit boom / QE and I'll grant you gold prices under 1000.Otherwise no, that's impossible. These things move together & in that manner.

What has killed, will kill or whatever The Repubes is that they are just Democrat Lite and part of THE ruling elite. There is no "right wing" only slightly less "left wing" versions of republicans. Now that all depends on the idiotic definitions used today of right and left.

Please tell me what part of either party is nothing but a statist, welfare/warfare orgy?

The Repubes are going through their usual fight between the establishment of The RNC (sometimes referred to Rockefeller republicans) and the rest of the complete fucking rubes who keep holding their noses and voting for the John McCains, Bob Doles, Gerald Fords, Mitt Romneys, Mitch McConnels, Paul Ryans, Cantors, ANYONE WITH THE LAST NAME BUSH et al INSTEAD of leaving "the party of Lincoln" who was one of the absolutely worst presidents of all time and finally realizing that the team they devoted themselves to for so long is nothing but a complete fraud that in PRACTICE is no different from The Democrat Party when it comes to government and the each criminla entity's DEVOTION to it.

And BTW Dems "get out the vote" or as you wrote "get people to care about elections" because they put cash in people's hands, drive them to the pollinh stations, and sometimes even have dead people vote. IN many cases over 100% of registered voters in heavily Dem precints vote. Even a full on math retard can figure that one out.

Actually Yves Smith has made it clear she was more 'left-wing' of a Republican 20 or more years ago and now the move 'right' (as if those terms really exist today) makes her look like a lefty - and she hasn't changed at all.blog: www.nakedcapitalism.com

As far as U.S. politics goes, the urban effeterati completely forget that they aren't the ones sending the politicians who want to hold a hard line on spending to D.C. in the first place, and the people who voted them in aren't changing their minds at all. I mean really, how does it matter that in California and New England they hate the Tea Party types even more- they don't elect them in the first place. He isn't up for re-election but do you really think that Texans don't like Cruz now after he started a massive fight over Obamacare and it blew up on launch? Do you imagine that South Carolina isn't going to re-send the same House delegation that have voted against anything that even resembles additional spending and pissed off the Team Elephant leadership at every turn (and fairly likely kick Sen. Lohan out?)

Thee are local elections coming up and nobody changed their minds, people inside the leftist urban bubble zones don't vote in the elections where the few trying to halt spending come from. Nobody in the South gives a shit about what the people of Massachusetts or California think at all or what their press says. Most well and truly despise them and wish they would just flat out die.

Not much will change politically, the people electing the Tea Party types certainly haven't and the ones who hate them have no power in such places.

somebody said people are going to lose confidence in the money. thats silly, money is like electricity, do you lose faith in electric power because the power company screwed up? that said there is no bigger mania than money, and bitcoin proves that assertion. if people lost confidence in money why is bitcoin doing so well. its also likely that the fed no longer controls the money supply, although the constitution says that congress controls the (one and only) money, they gave their power to the fed and now private enterprise has set up shop next door. none dare call it counterfeiting. (who is Bitocin going to monetize debt for?) the change to alternative currencies will be complete if the new currency could not be held, but was transaction currency only. the feds money is technnically only transaction money, (unless it is backed with gold) and therefore bitcoin is just as good and maybe better. [what will the fed the government do, the current power brokers do not want to give up their hold on power, but they may lose their power when a pure transaction currency replaces them, their money is no store of value any longer, thank you RMN] a transaction only currency destroy fractional reserve banking [if you want to end that system you could simply back the cash with cash real cash, green stuff, and make the bankers hand it around] debt is the inverse of the storage value of money. if i had loaned a lot of money out i would call my debts before this happened. the collateral less economy is the debtless economy.

I certainly have no faith in reliable delivery, cost-effective delivery or efficient transport by the company.But 'money' today isn't actual money, it's the delivery-vehicle designed by a person (who is corrupt) and its purpose is to siphon off real value for others who are corrupt (and it works).Should I have faith in that?

Well, you know, charging rich people 85% tax is a good way to grow the economy, combined with confiscating vacant investment properties and giving them to the poor. France could really post some big growth numbers next year.

If Joe is a betting man, I would like to place a few wagers, particularly against his prediction that the Democrats will retake the House after foisting the biggest cow turd in history on the populace.

Another prep schooled Ivy leaguer brainwashed by all the latest intelligentsia crap convinced he knows everything douche bag from the State Department or Langley. These guys are consistently wrong just like keynesians and jehovah witnesses. To be honest, their company is unbearable.

And don't you have the impression that you are doing exactly the self-same thing that you seem to criticize in the author of the text, namely, possessing all of the right answers and knowing the truth from the falsehoods that are exposed and espoused? The only difference is that the author, that you consider to be a douche bag, is in your 'humble' opinion erronious in his thinking. He or she most certainly thinks the same of you. It never ceases to amaze me that people who are bigotted always end up calling the others that disagree with them douche bags, rather than actually providing any form of intelligent argument that is backed up by founded rooted theories or information that would prove the contrary.

You shall notice that I began by asking a question rather than saying that I thought you were wrong. Please, pray do, bring us the real answers if you have them to your comments rather than vociferating in your back yard quietly. We would all be very interested in what you have to say. After all, the site is here to create dialogue not simply to shout down those that disagree with our own very persona opinions. I feel that this site would be worthless if people all agreed. It is worthless unless we all provide backed up arguments instead of just mouthing off when we feel like having a rant because we don't like Ivy Leaguers, or becasue we weren't Ivy Leaguers, or because we dislike Keynes. It does nothing to say that somebody's company is unbearable without answering eaxctly why.

India and China will do whatever they like, so whatever a declining US does RE climate change means little. BUT IF we wanted to insure the minimum impact from burning fossil fuels, we would try to arrange that as much of it as possible is burned in clean western plants and engines, and as little as possible in China and India. In other words, it's a non-problem with no solutions.

No greater number now than in the past, the earth warms and then cools again time and time again. Where I live now has been under a glacier more than once in the past and will be again no matter what plans mice and men have regarding it.